During the 1930s, as part of the New Deal, Franklin D. Roosevelt nationalized banks, set prices, wages and work hours, and promoted public works programs to employ the unemployed. The New Deal, or the National Industrial Recovery Act (NIRA) to be precise, was supported by many industrial leaders, some of whom had helped draft the legislation. Cartels, inflated prices and subsidies were great perks for established business, especially those that would have trouble staying ahead in a free market.

Like the New Deal period, we are seeing waves of nationalization, bailouts of unrelated industry, and expansion of central bank power. The nationalization of banks during the New Deal was actually smaller than what we are doing today – as a percentage of GDP it was the equivalent to about $500 billion. Today the state took shares in the largest nine banks and bailouts total well over a trillion dollars.

As John Goldberg points out, the stake that government now holds in these banks is actually greater than the stake it held in Fannie Mae and Freddie Mac, and it is quite likely that this temporary measure might too become the regular state of affairs.

If Obama is the next president, he would like to see a return to union domination and government mediation in wages and hours. Obama also favors public works programs to employ those out of work. He has already proposed at least two kinds of programs like this: his “transitional jobs” program which hires the unemployed, and his National Infrastructure Reinvestment Bank. With the excuse of an ongoing recession, he could easily roll these into New Deal sized public works projects.

But, prior to the New Deal we had small government. Prior to this new “New Deal” we already have enormous government and massive debt. The Deal we sign today would be for European style socialism, with European style unemployment and stagnation.

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Why do we let our gov't do what they do.We are a bunch of wimps who don't stand up for freemarket capitalism.We've got to stop gov't from eroding away our freedom.The time is approaching for a taxpayer rebellion.I think it was Thomas Jefferson that said that because of the tendency of gov't to oppress that"at times the tree of liberty must be nourished with the blood of patriots".We are not yet at that extreme but if things keep going the same way it may come to that.In the meantime business leaders should take steps to pressure the people and gov't to realize what the loss of freemarket capitalism would mean to their standard of living.Ie.Move businesses to more favorable environments cut off doing business with socialists whether it be private individuals or large corporations or state gov'ts.

[…] Today, people like Obama describe themselves as “social democrats.” They will say they believe in the free market, but they will add that they also believe government action is needed to provide a safety net and to keep unscrupulous capitalists from taking advantage of downtrodden workers and consumers. They don’t want to nationalize industries (the hallmark of socialism), but they do want to put lots of constraints and controls on most if not all industries (an idea sometimes called corporatism). […]

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